Tax refunds under the agreement’s $17 billion “inflation relief package” would provide $350 to individuals making less than $75,000 per year. Couples making less than $150,000 who file their taxes together would receive $700. If families in those categories have at least one dependent, the deal calls for them to also receive another $350. That means families could receive up to $1,050.
The agreement also would provide checks, although in smaller amounts, to many people who make more money. The smallest payments are designated for individuals making up to $250,000, who would get $200. Couples filing jointly who make less than $500,000 will receive $400, plus an additional $200 for dependents.
Under the plan, the state would send people the money through direct deposits and debit cards beginning in October. The state’s Franchise Tax Board estimates all the money would be sent out by early next year, said H.D. Palmer, spokesperson for the state’s Department of Finance.
The state budget deal must be passed by the Legislature and signed by Newsom to become law, but a statement from legislative leaders, Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon, saying they’ve signed on to the deal indicates that will happen.
In addition to the tax refunds, the budget agreement would also suspend the 23-cent state sales tax on diesel for a year starting Oct. 1, Palmer said. Under the agreement, the state would provide local governments the revenue that would have come from the diesel tax, to avoid stalling local transportation projects.
The agreement also includes money to help Californians pay their rent and utility bills, the governor and legislative leaders said. It also adds $47 billion in infrastructure spending and $200 million for reproductive health care in the wake of the Supreme Court decision this past week overturning Roe v. Wade.
“In the face of growing economic uncertainty, this budget invests in California’s values while further filling the state’s budget reserves,” Newsom, Atkins and Rendon said in a written statement.
The announcement of the deal indicates Newsom’s proposal to send $400 payments to vehicle owners is dead. Newsom had initially made the proposal to provide targeted relief from high gas prices that his administration said could be sent out to Californians more quickly than payments to tax filers. But he failed to get lawmakers to sign onto the idea.